Interconnection

One essential area of regulation involves efforts to create the conditions necessary to allow new entrants to provide their services on the market. In order to enable competition between new providers and the former monopolist, it is necessary to ensure access to the former monopolist's telecommunications network and other operators' networks, which is essentially achieved through the interconnection (IC) of networks.

The interconnection of communications networks serves to ensure interoperability between subscribers in all public telephone networks (Art. 22 TKG 2003) and is defined in Art. 3 No. 25 TKG 2003.

Under Art. 48 Par. 1 TKG 2003, every operator of a public communications network is obliged to provide an interconnection offer to other operators of such networks upon request. In this context, all parties involved must pursue the objective of enabling and improving communication among the users of different public communications networks. Should these operators be unable to reach an agreement on interconnection in accordance with Art. 48 TKG 2003, then any party involved can call upon the regulatory authority (Art. 50 Par. 1 TKG 2003). In order to involve the regulatory authority, an interconnection service must have been requested and the operators must have attempted to negotiate an agreement on that service for a minimum of six weeks. As the regulatory authority only plays a subsidiary role in this process, another requirement is that no valid agreement on the respective interconnection service exists between the communications network operators and no order has been issued by the regulatory authority in lieu of the agreement which could not be reached.

The regulatory authority's order, which defines the terms and conditions of interconnection, ultimately serves as a substitute for the required private-law agreement which could not be reached by the operators (Art. 121 Par. 3 TKG 2003).

Positions of significant market power (Art. 35 TKG 2003) identified on markets susceptible to sector-specific ex-ante regulation may have effects on how interconnection relationships are realized.

In case of disputes between operators with regard to the content of interconnection agreements, origination and termination charges usually gain specific importance. Potential criteria for determination of those charges are e.g. the cost for usage of the corresponding network elements which may be calculated based on the cost of the operator concerned ("Top-Down") or based on the cost of a hypothetical efficient operator ("Bottom-Up"). Another potential criterion may be to consult origination or termintion charges of other national or international operators for comparable services ("Benchmarking").

For calculating top-down cost, the forward-looking long-run average incremental cost ("FL-LRAIC") have been widely used by the regulatory authority in the past (for more information pls consult the RTR position paper in the link further below). For calculating bottom-up cost, the regulatory authority has pereatedly used analytical bottom-up cost models in the past (information related to the cost models used can be found in the links below).